Bankers hope for gold in mining M&As in 2018 – by Niall McGhee (Globe and Mail – January 1, 2018)

After years of “Will they or won’t they?” talk, 2018 may finally be the year of consolidation among Canada’s intermediate gold companies.

Mergers and acquisitions in the mining industry ticked higher in 2017 compared with the year before. But deal-making activity is still a long way below the boom years.

The value of announced M&A with any involvement from a Canadian mining company was $10.7-billion (U.S.) in 2017, up about one-third from 2016, according to Thomson Reuters data. In 2011, the last big year for the industry, mining M&A exceeded $40-billion, and in 2007, a staggering $98-billion worth of deals were done – highlighted by megadeals such as Rio Tinto’s takeover of Montreal’s Alcan Inc.

“We’ve never really gotten back to those heady days,” said David Cobbold, head of mining investment banking with Macquarie Capital Markets Canada Ltd.

And while we’re unlikely to return to them any time soon, Mr. Cobbold said, a number of intermediate gold companies could come together in 2018 – an event that could spark a domino effect of more sizable takeover deals.

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